FMDQ pledges to improve efficiency in Nigeria’s fixed income market

FMDQ OTC Securities Exchange has reiterated commitment to the development of fixed income securities market in the country.

Tumi Sekoni, associate executive director, FMDQ, made this remark while receiving capital market development award given to the exchange  by Capital Market Correspondents Association of Nigeria (CAMCAN).

According to Sekoni, one of the mandate of the securities exchange is to educate investors, as “investor education is critical to increasing retail participation in the nation’s capital market,” she said.

She commended CAMCAN for recognising FMDQ OTC for its contribution to the development of the Nigerian debt capital market, adding that the company recently deployed a fixed income market STP settlement solution through its proprietary market system – FMDQ’s Q-ex, a customised integrated multi asset trading system with attendant post-trade services capabilities.

Sekoni described this solution as an achievement, which she said was based on the critical support of the CBN and the FMDQ Dealing Member (Banks).

FMDQ’s Q-ex has been integrated with the CBN’s Scripless Securities Settlement System (S4) to provide STP capabilities for efficient settlement in the fixed income market, improving the efficiency of the trading, reporting and settlement processes, whilst further developing, in no small measure, the Nigerian financial markets.

According to the Exchange, Q-ex provides an unrivalled means through which trades executed by its Members (currently the Dealing Member (Banks), are reported and subsequently settled, with minimal to no human intervention, via the respective channels.

The deployment of the FMDQ Q-ex Settlement Solution operated by FMDQ Clear Limited, a wholly-owned subsidiary of FMDQ, will essentially streamline business processes to reduce friction along the fixed income trades settlement value-chain, boost productivity of the market participants and promote efficiency of post-trade services.

 “It can be argued that the Nigerian fixed income market has not been performing at its optimum, as the market has been marked with bouts of low productivity, inefficiency and invariably, settlement defaults, all of which would likely have marred the market’s integrity and significantly lowered investor confidence,” the company said.

FMDQ OTC Securities Exchange further explained that with integrity being one of the key ingredients for a successful market, as adjudged by global counterparts, the achievement of STP in the fixed income market via the integration of Q-ex and the CBN’s S4 could not have come a moment too soon, as this integration sets a clear and certain path for market-wide confidence in the Nigerian fixed income settlement processes, and by extension, the restoration of the fixed income market.